MPs funding deal set to collapse

Tony Windsor: “All this is doing is locking in the two giants, the two major parties, so they have this massive advantage over anyone else who wants to enter the playing field.”
Photo: Andrew Meares

by
Phillip Coorey | Chief political correspondent

A secret deal between Labor and the Coalition to award political parties $10 million a year in extra public funding is on the brink of collapse following a fierce public backlash.

The federal Coalition has refused to endorse the deal publicly and senior Coalition sources told The Australian Financial Review on Wednesday night that the chances of it now supporting the legislation were “grim".

The government was intending to put the legislation to the Parliament on Thursday but has now abandoned that plan pending negotiations with the Coalition.

It is understood there was a phone hook-up Wednesday evening between the Liberal Party federal director,
Brian Loughnane
, who negotiated the deal with Labor’s national secretary,
George Wright
, and state Liberal Party directors.

Sources said the states rounded on Mr Loughnane and resolved to oppose the funding deal.

Separately on Wednesday, Coalition MPs, including
Russell Broadbent
, joined Labor MPs in going public with their opposition and it is understood senior members of shadow cabinet were also opposed.

If the legislation were ever to be introduced, there would be a Coalition party room meeting held first to determine a final position but this scenario now appears remote.

Despite Mr Loughnane and shadow special minister of state
Bronwyn Bishop
being a party to the deal with their Labor counterparts, the Coalition appears to have walked away.

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Because the Coalition is expected to win the election strongly, it stood to benefit the most from the new money.

The backlash over the plan is also causing internal problems for Labor. Inside Labor, some were trying to link dissent to old leadership tensions.
Kevin Rudd
was reported to be backing the opposing view.

Every independent and minor party said they would oppose the deal to award $10 million a year in extra public funding for political parties.

But if the legislation passed, the Greens and
Bob Katter
said they would keep the money for which they are eligible, saying to reject it would only widen the competitive gulf between themselves and the major parties.

“The Greens have no intention of allowing the old parties to entrench themselves to the detriment of the Greens or independents,’’ said Greens leader
Christine Milne
, whose party would receive about $1.8 million over three years based on its recent electoral performances.

Mr Katter would be eligible for $38,170 based on his individual performance in 2010. He would be eligible for much more after the next election because he has formed a political party and is running candidates in both houses nationally.

“The reality is that political parties do not run on thin air. Do you want politicians who are owned and controlled by major parties’ corporate cronies, or do you want your political representatives financed by the people, who will therefore be their masters?"

None said they would accept the money if the legislation passed and Mr Oakeshott and Mr Windsor said they would do their best to stymie the passage of the legislation.

Under the deal, elected parties and independents will receive $1 for each vote they gain in the House of Representatives and $1 for each Senate vote. The money will be paid at 33¢ a year and in quarterly instalments.

On top of this, each party as defined by having a minimum of five senators or MPs will receive $300,000 a year in annual “compliance funding’’. The new funding will be worth $10 million a year to be divided between all players.